AZ Gov Signs Orders Prohibiting Prediction Market Insider Trading

• Arizona Gov. Katie Hobbs (D) today issued an executive order prohibiting insider trading for event contracts
• Any employee found engaging in such behavior may be subject to dismissal or referred to law enforcement officials
• The executive order prohibits Arizona employees from disclosing or using nonpublic information to participate in the prediction markets

Arizona Gov. Katie Hobbs (D) today signed an executive order to prohibit state employees from disclosing or using nonpublic information to participate in the prediction markets.

Executive order 2026-02 officially prohibits Arizona state executive branch employees from using nonpublic government information to profit, avoid financial loss, or assist others in profiting on prediction markets.

“Arizonans deserve a state government that works for them, not one where insiders exploit public service for their own gain,” Governor Hobbs said in a press release. “I’m proud to set clear, commonsense ethical standards on prediction markets to hold our government accountable. Public service is a privilege, and we will not tolerate anybody abusing that privilege to line their own pockets.”

Punishments Set for Insider Trading

If found engaging in insider trading on prediction markets, Arizona employees may be subject to dismissal from their positions, other sanctions, and referral to law enforcement.

The executive order officially designates all nonpublic information obtained during public service that could be used for wagers on the prediction market as confidential.

“In order to ensure the proper conduct of government business, to the extent not already so designated, all nonpublic information obtained by Arizona State executive branch employees due to their public service that could be used for profit or the avoidance of loss via transactions on prediction markets is hereby designated confidential. Such designation is warranted in order to preserve public trust in the proper functioning of State government,” the executive order notes.

The employees affected by this new executive order will include all employees and officers of the governor’s office, all executive departments, agencies, officers, and all state boards and commissions, except for any state agency headed by a single elected official, the corporation commission, and any board or commission established by ballot measure during or after the November 1998 general election.

The order encourages other statewide elected officials, independent boards and commissions, and the judicial and legislative branches to adopt comparable policies for their employees.

Citing Previous Insider Trading Instances

The order notes the importance of insider trading deterrents following two national instances of employees winning large amounts of money by placing wagers on government actions.

The order pointed to the instance of Gannon Ken Van Dyke of North Carolina, a service member in the U.S. army, who allegedly used classified nonpublic information to generate more than $404,000 in profits through Polymarket event contracts.

Van Dyke allegedly purchased more than 436,000 “yes” shares of the “Maduro Out by January 31, 2026?” contract listed on Polymarket.com to generate the revenue.

It also referenced the instance of a Polymarket user winning hundreds of thousands of dollar on bets regarding U.S. involvement in Iran. A Polymarket user named “Magamyman” allegedly profited $553,000 by placing bets on the platform regarding Iran’s Supreme Leader, Ayatolla Ali Khamenei, hours before an Israeli air strike killed him in late February.